Five Questions: Define Ventures’ Lynne Chou O’Keefe

In this series, Digital Health Business & Technology interviews a range of digital health investors from those who work at venture capital firms and at health system and health insurance venture funds to individual and angel investors. If you’re interested in participating, email us here. 

Lynne Chou O’Keefe founded Define Ventures in 2018 at a time when there weren't many digital health-focused venture capital firms in Silicon Valley. 

 “There were firms that either dabbled in healthcare [as a generalist Silicon Valley venture capital firm] or had deep healthcare backgrounds but didn’t have Silicon Valley principals,” O’Keefe said. “That’s where Define was born.”

Define has invested in 21 startups out of three funds across Seed, Series A and Series B rounds. Some of its notable portfolio companies include direct-to-consumer telehealth company Hims, women’s health startup Tia and value-based primary care services and technology company UpStream.  

O’Keefe spoke about why she was all in on hybrid healthcare models before it became trendy, her advice to entrepreneurs during “war times” and more. The interview has been edited for length and clarity.

What is the overall theme of Define Ventures’ investments into digital health?

We’re rebuilding the house of healthcare. It starts with the front door, which are consumer gateways. How people will enter the house of healthcare is shifting and changing. We see that in the way health and wellness has merged. People want [healthcare] to feel [as easy as getting] transportation, food and all these other areas. 

Once we go through the front door, we are on the foundation layer of the house. Every clinical and business decision rests on that foundation layer of data liquidity and analytics. If we’re going to realize the dream of more personalized health care…we really have to understand that data. We focus not only on interoperability of clinical and claims data, but also dark [lesser available] datasets that drive and influence healthcare outcomes. For instance, community-based health and social determinants of health are dark datasets.

If we understand the patient better through clinical, claims and community-based data, we can merge that data and use an analytic layer to look at what’s true and what’s not. It’s the hallways of the house. How should you weave through the house where care is given in different rooms? And that's tech-enabled services and digital therapeutics. The last area is vertical reimagination. I call it full stack houses where new entrants are attacking the incumbents with end-to-end platforms.  

It sounds like you want these companies to complement each other rather than just be random investments?

It’s really important to not only define areas of opportunity for the betterment of healthcare and drive returns, but to stitch them together. We've always talked about the house of healthcare, but on another level, healthcare is actually neighborhoods. It's not just one house. It's multiple houses. There are houses for payers, providers and life science companies. Now we have an ecosystem, a neighborhood that has to interact in this way. At Define, we think very much about that ecosystem. We have deep, standing partnerships where we've incubated companies with our partners and give our companies an advantage in building up.  

What conversations are you having with portfolio companies about the economy?

No matter what macro environment we’re in, startups must grow and evolve. The difference in leadership is seen in war times versus peace times. We’re in war times. That means making the hard choices, right? We don't have the luxury of going down five [product] pathways. Sometimes when there is a lot of cash available, you can do a lot of different things and experiment. Right now, companies must focus and leaders have to make the hard decisions. When you're building and scaling, it's not only who you are but who you are not. Making those hard decisions takes real leadership. It’s also important to remind employees, the company’s North Star has not changed. You just have to be more laser focused in getting there. 

What do you focus on when entrepreneurs are pitching you?

I always like to say “Do you understand your V1, V2 and V3?” Version 1 is who you are today. What do you absolutely have to prove with this round?  V2 is who will you be tomorrow? V3 is if you earn the right to change healthcare, what would that look like? A real leader understands that V1, V2 and V3 and how one unlocks the other. We want to listen to that vision and strategy because that's the next 10 years of building a company together. We also want to know why this company matters to them. What is important to them? We ask, “What drives you to do this?” 

In early 2021, I read an interview where you were promoting the idea of hybrid in-person virtual health companies over pure telehealth plays. What made you recognize this shift before it became trendy?

It comes back to doing things at the highest of standards. What is clinically efficacious? When I talk about clinical efficacy, we have simple principles. You can’t do everything in a virtual environment. When I met the founders of Tia, we had seen a lot of telemedicine companies around women's health. But we asked the simple question, “If you're going to own women's healthcare, you have to have bricks and mortar, right?” There are certain things in women's healthcare, with the annual wellness exam for instance, where it would not be the gold standard of patient care to do that at home.  Even though the trend line says something else, we’re not afraid to really stick to what we believe is right for patients and for healthcare. Healthcare has a human touch.